World Candy – Preliminary Business Plan Research Example

World Candy was a fake business that I created with a group of colleagues in school. This is our research, including demographic research and SWOT analysis, that we used in our business plan to present to our class. World Candy is a company that sells candy in a retail shops that targets wealthy consumers in high-income areas.

Demographic Profile
Demographic Analysis
SWOT Analysis

We did our market research at Woodfield Mall, where we are going to open our first store.  We talked to 40 people.

Demographic profile:

Age range:

Under 25 – 8 people
25 – 40 – 17 people
40 – 55 – 9 people
Over 55 – 6 people

Gender:

Male – 17
Female – 23

Marital Status:

Single – 5 people
Married – 31 people
Divorced – 4 people

Household income range:

Less than $50,000 – 9 people
$50,000 – $70,000 – 20 people
$70,000 – $100,000 – 7 people
More than $100,000 – 4 people

Education:

High school – 2 people
Some college – 2 people
Associate degree – 5 people
Bachelor’s degree – 24 people
Master’s degree – 7 people

Demographic Data Analysis

Of those that we surveyed, we found that most people seemed enthusiastic about our company and showed interest in buying candy from all parts of the world.  We found two main groups of people who showed interest in our idea.  First, we found a handful people who claimed they would buy our candy as a novelty gift for friends and family.  It would be a unique present to give and it provides a great alternative to the common flowers and chocolates gifts. These people said they would like to be able to buy individual candies as well as baskets.  Some even suggested our idea would be similar to the idea of “Edible Arrangements” which is a company that offers unique gift ideas in the form of fruit and chocolate arrangements.  Respondents suggested that the baskets be customizable so they had the option to mix and match candies and chocolates from all parts of the world.  Some also suggested doing regional baskets, i.e. a basket with sweets from Scandinavia or Eastern Europe.  The second group of people we identified through our surveys was those who had previously tried candy from other parts of the world but were not able to easily acquire that candy here in the United States.  These people ranged from those with foreign nationalities (Mexican, Polish, German, etc.) and wanted the candies or chocolates of their heritage to those who had simply traveled abroad and wanted to have a specific type of candy available to them in the USA.  These people wanted the candies for themselves as opposed to gifts.

Those surveyed said they would buy the candy as an irregular treat instead of on a regular basis.  It would be for special occasions like parties or birthdays.  They did not see themselves buying our candy weekly or monthly but more on need-basis opposed to a want-basis.  The prices given to us varied according to the type of candy and the packaging (i.e. gift basket or individual pieces).  The price range for individually wrapped candy was $6-$12 per pound.  For gift baskets, the prices ranged from $20-$50 depending on the size and the content.

A number of participants that we surveyed presented the strong desire for an e-commerce site. This way, customers could order online and have gift baskets sent directly to a recipient. Many of our participants thought this would be especially useful around holiday time, when most people are very busy and looking for gift ideas. Respondents wanted candy baskets to be customizable, so they could present a unique gift versus a standardized product. The e-commerce idea also proved popular with birthday gifts, as direct delivery would save shopping time from a brick and mortar store.

Many participants liked that World Candy is focusing on maintaining a variety of selection of candy from around the globe. A number of respondents said that they enjoy foreign sweets, and would visit our store if they had access to a large variety. However, many said that they would only frequent a brick and mortar store for gifts and special purchases as large amounts of candy in one’s diet is not viewed as appropriate. This supports our decision to develop an e-commerce website.

People seemed interested in the types of candy we are going to offer and seemed excited at these new types of candy that they couldn’t find in their convenience store or grocery store. We also asked some people from different ethnicities and they were happy that they could get the candy from their home countries. Overall, there was a great level of excitement for the products that we are offering.

We received good feedback and suggestions for what could be improved upon. One example, as previously mentioned, is a website where people can place orders but they said the store was still important because they liked being able to physically see and touch the candies. The online store would be convenient for people who wanted to buy bulk of something they liked. Another suggestion was that we offer not only wrapped treats but also treats that we made or that don’t come in wrappers; this could be ice cream, fudge, or Oreos dipped in chocolate.

Based on the information we gathered in our research, we can safely alter our business strategy with confidence to better increase our competitive advantage.  First, we would add an online website component to the World Candy business.  The website would act as a “Point of Sale”, or web store, where any visitor could purchase our items and have it shipped directly to their home or business.  Our research at the Woodfield Mall told us that the majority of or targeted visitors are educated and have discretionary income.  These are great potential customers for both retail and web sales. The web store also acts as a “virtual advertisement” on the World Wide Web.  In other words, whether the sale is made from a visitor or not, we still gain a competitive advantage by branding our image online and off.  The web store is also a low-cost project, leaving the payback period relatively low.

We mainly noticed many of our research participants liked our idea of hosting a large array of unique or ethnic candy from different regions all over the world.  With the use of an online database and the online web store, we can easily offer a large variety of inventory to our customers with only a few clicks of the mouse, and right from the comfort of their homes.  These changes would dramatically increase our visibility as a business, giving our online customers the ability to order and track candy to whoever they decide – including themselves.

SWOT Analysis

WEAKNESSES:

    1. Candy has been around for thousands of year, so it is very important not to underestimate how saturated the market is. One large weakness in the candy industry is the small margins involved. This issue is almost directly related to the cost of rent for the candy store.
    2. Issues of social health awareness can potentially hurt the candy business, especially if sugar or other related health issues are mainstreamed in society.
    3. Technological weaknesses include the lack of a Point Of Sale outlet via the World Wide Web. An internet candy store, in addition to a physical retail location, will add sales with little cost involved.
    4. The largest cost involved in starting a candy store is the rent. The cost of inventory would be the second largest cost. Because of this, World Candy needs a relatively large amount of start-up capital in order to successfully turn a profit, as well as remain enough liquidity to pay employees and other costs.
    5. Like political issues, government regulations or upcoming trends Many organizations, both governmental and communal, have been created to specifically target the modern societal issues related to candy and sugar – specifically those containing high-fructose corn syrup. These social issues potentially hinder World Candy sales.

THREATS:

    1. The specific niche for World Candy is not simply candy, but international candy. We also will be designing gift baskets to sell. This niche is not as saturated as other general candy stores, but threats of competitors still exists. The main competitor that most closely imitates our business is Harry & David candy store.
    2. In order to compete against modern threats, World Candy needs a website that integrates a Point Of Sale system in order to make online sales.
    3. World Candy’s niche specifically targets a demographic that has mid to upper level incomes.
    4. Laws and regulations against sugar content in certain foods can prevent sales. Also many politicians, despite having passed any laws, can still put a negative spin on candy and sugar
Need an SEO Consultant for your Local Business in Chicago? Contact me today for a free initial SEO consultation for local business owners in Chicago and Chicagoland area.
or
Download my 2016 SEO Best Practices Guide for some free tips!

No Comments - Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

*